Twitch streaming platform will lay off 35% of its employeeswhich equals approx 500 workers. This is according to sources from the company who spoke Bloomberg News, the reduction in the number of employees is mainly due to poor financial results and the growth of platform users, who were forced to lay off already last March 400 employeesincluding several high-level executives.
Along with YouTube, Twitch is the most widespread and well-known live video streaming platform in the world and is owned by Amazon, who bought it in 2014 for almost billion dollars. Nine years after its purchase, however, the company is still losing money. After peaking in 2021, a steady decline of the platform which led at the beginning of last year to average audience drop of 9.4%. and hours monitored per year.
“Start a support website 1.8 billion hours of live video content per month It’s extremely expensive, despite Twitch’s reliance on Amazon’s infrastructure.”stated company executives in Bloomberg. Due to the difficult financial situation and shortcomings in the business model, already in December 2023 CEO of TwitchDan Clancy, announced that the company would be forced to cease operations in South Koreawhere is the cost of “disproportionately high“. In fact, the company shared that in an Asian country where there are for foreign companies rates ten times higher compared to the world’s performance in terms of internet usage.
Among the major issues that have always plagued the streaming company is Business model. Twitch has changed its approach several times over the years financial strategy pointing to increase advertising broadcasts through its channels (a direct source of income for the platform). This choice was exciting dissatisfaction and disappointment among users of content creatorsunwilling to give additional space to advertisements during their live broadcasts which discourage the public continue watching.
In June 2023, Twitch implemented new rules with a goal of limit sponsorship and branded content agreed between content creators and companies outside the platform. These practices actually resulted in loss earnings for Twitch. However, due to the strong controversy the proposal caused, the company later decided to withdraw the rules. The criticism of users was amplified by the fact that the percentage the reward on Twitch is lower than on other platforms.